Telecom Retail Market Study

A brief analysis of market sentiment of telecom products in the retail industry in NigeriaNovember 12-18, 2015

ByChinelo Sophia Ezenwa

Research Analyst

About this study

This report provides insight on the perception of retailers regarding recharge card(airtime credit) sales, demand and supply patterns as well as distribution of airtime credit. It also highlights retailers feedback on network related issues like network quality in placing a phone call which is covered in the sentiment analysis.

The study was conducted across 7 regions; Far East(Abia, Benue, Ebonyi, Enugu), Far North(Adamawa, Borno, Gombe, Jigawa, Kano, Katsina, Kebbi, Sokoto, Yobe, Zamfara), Core East (Anambra, Delta, Imo), Core West(Edo, Ekiti, Kwara, Ondo, Osun, Oyo), Middle Belt(Bauchi, FCT-Abuja, Kaduna, Kogi, Nassarawa, Niger, Plateau, Taraba), Lagos/Ogun(Lagos, Ogun) and the Riverine(Akwaibom, Bayelsa, Crossrivers, Rivers).An online survey template was used to collect feedback from recharge card sellers. Feedback was continuous and recorded on a daily basis from 79 respondents; a total of 281 unique comments were recorded during the period November 12-18, 2015.

Questions Asked

Based on the experience in your area today, please rate each operator as described below. Give any score between 0 and 5; where 0 is the least and 5 is the highest.

Which recharge card amount and for what network did you sell the most? Which recharge card amount are customers asking for but you do not

have? Please indicate network. Which network’s sim card did you sell the most? Which network is the best for internet browsing in your area? Which network is the best for making phone calls in your area? What network would you recommend? What is the problem with making a phone call in your area?

Retailers rating of mobile networks across Nigeria

It is easy to picture MTN leading due to the market dominance it currently enjoys; having a market share of 42% (Source: NCC September 2015). MTN is the highest rated with an average of 4.8 leaving closely behind Etisalat with a 3.4 average, followed by Airtel and Glo tying the knot at 2.8. These ratings are purely based on the perception of retailers interviewed everyday for the study period and may have further implications on sales volume, propensity to recommend a mobile network and market sentiments.

Questionaire Type: PAN NIGERIA

MTN AIRTEL GLO ETISALAT

Based on the experience in your area today, please rate each operator as described below. Give any score between 0 and 5; where 0 is the least and 5 is the highest.

4.8 2.8 2.8 3.4

Retailers rating of mobile networks across regions

Questionaire Type:MTN AIRTEL GLO ETISALAT

LAGOS/OGUN 5.0 3.3 3.4 3.7MIDDLE/BELT 5.0 2.8 2.2 3.9FAR NORTH 4.7 2.8 2.4 4.0CORE WEST 4.7 2.6 3.2 2.5CORE EAST 4.8 2.8 3.1 3.0FAR EAST 4.0 4.2 3.4 6.8RIVERINE 5.0 4.0 3.0 2.0

Based on the experience in your area today, please rate each operator as described below. Give any

score between 0 and 5; where 0 is the least and 5 is the highest.

Which recharge card amount and for what network did you sell the most?

N50 N100 N200 N400 N500 N750 N1000 N1500 N20000

20

40

60

80

100

120

140

160

180

4.25

170.5

47.25

14.25 13.756 8 9 7

AVERAGE MARKET DEMAND

Consumers are demanding more for NGN100 and NGN200 airtime amounts. We see a sharp rise in demand from N50 to N100 and sharp fall to N200. Demand continues to decline slowly from NGN400 as airtime value increases. Most Nigerians belong to the low and middle income groups; phone conversations are usually brief and most people opt for lower airtime denominations except for internet subscribers who consume at least NGN1000 data plans. The low demand for NGN50 airtime amount stems from its non-availability. Such amounts less than NGN100 may appear non-desirable considering factors such as inflation and billing rates or tariff; how long such airtime credit lasts before next purchase. Airtime tariff is as high as 40kb/s (kobo per second) in Nigeria for prepaid subscribers who have no existing tariff plan. Recently, we have seen tariff go as low as 20k/s off-net with the introduction tariff plans like MTN TruTalk.

N50 N100 N200 N400 N500 N750 N1000 N1500 N20000

20

40

60

80

100

120

140

160

180

200

220

3

138

61

19

08 3

2820

8

185

36

17 19

19

2 31

194

34

1221

6 82 25

165

58

915

9 124 3

DISTRIBUTION OF AIRTIME DEMAND ACROSS NETWORKS

MTN AIRTEL GLO ETISALAT

Looking at demand across networks, Glo tops the demand for N100 at 194 followed by Airtel(185), Etisalat(165) and MTN(138). Demand slopes downward to the right and continues slowly as airtime value increases.

Airtime credit demand across mobile networks

Relative market demand across mobile networks

RELATIVE DEMANDThe following networks were found to have the most demand of the following airtime amounts. The cells in pink show demand levels which are above market average.N50 AIRTELN100 GLON200 MTNN400 MTNN500 GLON750 ETISALATN1000 ETISALATN1500 MTNN2000 MTN

N50 N100 N200 N400 N500 N750 N1000 N1500 N2000

MTN 3 138 61 19 0 8 3 28 20

AIRTEL 8 185 36 17 19 1 9 2 3

GLO 1 194 34 12 21 6 8 2 2

ETISALAT 5 165 58 9 15 9 12 4 3

TOTAL AIRTIME DEMAND 17 682 189 57 55 24 32 36 28

AVERAGE MARKET DEMAND 4.25 170.5 47.25 14.25 13.75 6 8 9 7

Regional airtime demand by networks

N50 N100 N200 N400 N750 N1000 N1500 N20000

5

10

15

20

25

30

35

40

45

50

1

11 12

2 13

12

44

30

52

62

7

2

46

12 12

62

1114

75

23

8

2 1

MTN REGIONAL DEMAND

Core East Core West Far East Far North Lagos/Ogun Middle Belt Riverine

N50 N100 N200 N400 N500 N750 N1000 N1500 N20000

10

20

30

40

50

60

70

80

90

4

51

2013

7 61 14

20

2 2 2 13 4 1 1

102

23

17

2

78

82 2 1 1

AIRTEL REGIONAL DEMAND

Core East Core West Far East Far North Lagos/Ogun Middle Belt Riverine

Regional airtime demand by networks

N50 N100 N200 N400 N500 N750 N1000 N1500 N20000

10

20

30

40

50

60

70

80

90

1

48

17

6

17

5 81

5 2 1 1

12

25

3 2 1

23

71 2

81

5 51

GLO REGIONAL DEMAND

Core East Core West Far East Far North Lagos/Ogun Middle Belt Riverine

N50 N100 N200 N400 N500 N750 N1000 N1500 N20000

10

20

30

40

50

60

70

80

2

45

27

8 94 5 31

20

62 2 22

72

11

155

2 1 15 7

18

51 2 4

11

ETISALAT REGIONAL DEMAND

Core East Core West Far East Far North Lagos/Ogun Middle Belt Riverine

Which recharge card amount are customers asking for but you do not have?

N50 N100 N200 N400 N500 N750 N1000 N1500 N20000

10

20

30

40

50

60

7066.5

8.5 8.75

49.5

8.75

28.25

44.5

2528

AVERAGE MARKET SCARCITY FOR AIRTIME AMOUNTS

AVERAGE MARKET SCARCITY FOR AIRTIME DENOMI-NATIONS

A close look at the chart above which identifies scarcity for varying airtime amounts; it appears somewhat like the inverse of the demand curve obtained in slide 6. The least scarce airtime amount is N100 at an average of 8.5. Other recharge amounts with low scarcity levels include N200 and N500 both averages at 8.75.

Airtime scarcity across mobile networks

N50 N100 N200 N400 N500 N750 N1000 N1500 N20000

25

50

75

100

37

6 4

54

05

58

27

7771

127

42

8

3240

44

11

78

8 11

69

12

26

43

12 9

80

813

33

15

50

37

17 15

DISTRIBUTION OF AIRTIME SCARCITY ACROSS NETWORKS

MTNAIRTELGLOETISALAT

Relative airtime scarcity across mobile networks

N50 N100 N200 N400 N500 N750 N1000 N1500 N2000

MTN 37 6 4 54 0 5 58 27 77

AIRTEL 71 12 7 42 8 32 40 44 11

GLO 78 8 11 69 12 26 43 12 9

ETISALAT 80 8 13 33 15 50 37 17 15

TOTAL AIRTIME SCARCITY 266 34 35 198 35 113 178 100 112

MARKET AVERAGE SCARCITY 66.5 8.5 8.75 49.5 8.75 28.25 44.5 25 28

RELATIVE SCARCITYThe following networks were found to have least supply of corresponding airtime amounts. The cells highlighted in pink shows points with scarcity levels above market average.N50 ETISALATN100 AIRTELN200 ETISALATN400 GLON500 ETISALATN750 ETISALATN1000 MTNN1500 AIRTELN2000 MTN

Regional scarcity for airtime amounts across networks

N50 N100 N200 N400 N500 N750 N1000 N1500 N20000

5

10

15

20

25

30

35

40

2 3 31

21

4 5

17

6

13

25

3

81211

2 1 2 1 1 1

8

3 2 2 1

13

2 2

17

5

18

13

1

37

1

AIRTEL AIRTIME SCARCITY ACROSS REGIONS

Core East Core West Far East Far NorthLagos/Ogun Middle Belt Riverine

N50 N100 N200 N400 N750 N1000 N1500 N20000

5

10

15

20

25

30

35

40

45

12

3 1

21

4

149

39

57

4

9

3 32 3 41

3

14

6

14

25

41

29

1

8

1

MTN AIRTIME SCARCITY ACROSS REGIONS

Core East Core West Far East Far NorthLagos/Ogun Middle Belt Riverine

Regional scarcity for airtime amounts across networks

N50 N100 N200 N400 N500 N750 N1000 N1500 N20000

10

20

30

40

50

60

2 1 14

1

23

4 6 8 913

29

5 6

1212

1 2 2 1 1

8

2 2 3 2

13

1 2

21

3

55

10

21

GLO AIRTIME SCARCITY ACROSS REGIONS

Core East Core West Far East Far NorthLagos/Ogun Middle Belt Riverine

N50 N100 N200 N400 N500 N750 N1000 N1500 N20000

5

10

15

20

25

30

35

40

2 13 2 1

26

3

810

128

21

69

1211

1 2 1 2 26

3 3 3

15

3

23

2 1

19

37

8

11

ETISALAT AIRTIME SCARCITY ACROSS REGIONS

Core East Core West Far East Far NorthLagos/Ogun Middle Belt Riverine

What is the problem with placing a phone call in your area?

The most mentioned issue with placing a phone call across all geographic regions in Nigeria is network problem.

Which network is the best for internet browsing in your area?

Internet subscriber data Jul-Sep, 2015

September 2015

August 2015 July 2015

Airtel 17,730,955 17,495,014 17,605,852Etisalat 15,598,070 15,541,009 15,393,860Globacom 21,896,229 20,765,379 19,330,549MTN 41,835,294 41,411,846 40,485,670TOTAL 97,060,548 95,213,248 92,699,924

Source: Nigerian Communications Commission(NCC)

Which network is the best for making phone calls in your area?

Most sold network’s sim card?

What network would you recommend?

Le fin…Chinelo Sophia Ezenwachineloezenwa69@gmail.com I also do freelance market research, field research and data collection. Bonjour!